PetroVietnam appoints saviour for ailing fibre subsidiary
PetroVietnam appoints saviour for ailing fibre subsidiary
Vietnam's state-run oil and gas group PetroVietnam has recently appointed a new general director cum chairman of the board of directors to take charge of its ailing $325 million polyester fibre and yarn factory PVTex Dinh Vu Joint Stock Company (PVTex), according to newswire Vnexpress.
PetroVietnam charged new general director cum chairman Pham Van Chat to stop the continuous losses of PVTex within six months.
Chat said that Vietnam’s participating in the Trans-Pacific Partnership Agreement (TPP) would offer an opportunity for PVTex to restore its manufacturing activity as well as streamline its operation.
PVTex’s factory in the northern port of Haiphong was shut down in September 2015, merely a year after coming into operation. The company may be at the brink of bankruptcy due to higher-than-expected costs and uncompetitive products.
According to a report published by PetroVietnam, in 2015 PVTex incurred losses of VND1.2 trillion ($53.8), up VND120 billion ($5.38) on-year. PVTex’s poor financial standing made it impossible to pay off its total bank debts of $221.3 million, including $70.7 million in short-term loans.
In March, PVTex requested the Vietnam government for an additional $34 million loan to invest in the plant, with a 23-year payback time instead of the nine years stipulated by a previous loan. PetroVietnam also proposed that the government adopt tariff barriers against imported fibers from China and Thailand, and asked for help in selling the factory's products to local garment-makers.
PVTex is 74 per cent owned by PetroVietnam, With the remaining 26 per cent held by PetroVietnam Fertilizer and Chemicals Corporation. The factory came into operation in May 2014 after six years of construction. The facility has a capacity of 236 tonnes of polyester fibre and yarn per day.
